USDCHF Technical Analysis – Watch this key resistance area


  • The Fed hiked by 25 bps as
    expected and kept everything unchanged.
  • Fed Chair Powell reaffirmed their data dependency
    and kept all the options on the table.
  • The US economic data keeps on surprising to the
    upside, but inflation expectations and CPI readings continue to show
    disinflation with the last two Core CPI M/M figures
    coming in at 0.16%.
  • At the moment, the market doesn’t expect another
    hike from the Fed, but the next NFP and CPI data will be crucial to confirm or
    change this view.


  • The SNB raised interest rates by 25 bps as expected at the last
    meeting and communicated that additional rate hikes cannot be ruled out as it
    maintains the hawkish stance.
  • The Switzerland CPI showed the inflation rate easing
    even more within the SNB 0-2% target band.
  • The Unemployment Rate ticked higher a little.
  • Overall, it looks like the SNB can
    pause at the next meeting, barring any upside surprise before that date.

USDCHF Technical Analysis –
Daily Timeframe

On the daily chart, we can see that USDCHF
continues to pull back into the key trendline where we
can also find the previous support now turned resistance and the
50% Fibonacci retracement level.
This is where we can expect the sellers to pile in with a defined risk above
the trendline to target a new low. The buyers, on the other hand, will want to
see the price breaking higher to invalidate the bearish setup and start to
position for more upside.

USDCHF Technical Analysis –
4-hour Timeframe

On the 4-hour chart, we can see that we’ve been diverging with the
MACD for a
while now and this is generally a sign of weakening momentum often followed by
pullbacks or reversals. In this case, we saw several pullbacks along the way as
the price approaches the key trendline. If the price breaks decisively the support level at
0.8761, we will have a higher probability of a reversal and the sellers are
likely to jump onboard to extend the fall into new lows.

USDCHF Technical Analysis –
1-hour Timeframe

On the 1-hour chart, we can see that we
have two strong areas now: the support at 0.8761 and the resistance at 0.8850.
A break on either side should lead to a more sustained move as momentum traders
are likely to pile in.

Upcoming Events

This week is
pretty empty on the economic data side as we will only have the PMIs today and
the US Jobless Claims tomorrow. Given the strong appreciation in the US Dollar
seen in the past weeks, we can expect some USD weakness if the data misses
expectations, and we will likely need much stronger than expected readings to
see another sustained rally in the greenback. Remember also that this is the
Jackson Hole Symposium week, so we will hear from many central bankers
including Fed Chair Powell, who is set to speak on Friday.

This article was written by FL Contributors at Source